4.1.1 National policies for innovation - the focus on education
Helsinki and Finland are presented as an example of successful development of knowledge industries, especially ICT, thanks to a long historic tradition to top-down centralised national policies. National policies, investments in education and creation of the welfare state have been central to the emergence of the Helsinki region as an international hub in the knowledge industries. Despite the acknowledged success of national policies, some questions are raised regarding the role of more local and regional factors. One conclusion from the studies of Finnish innovation capacities, or the ICT sector, is that there is a major divide between national and regional parts of the Finnish innovation system. Currently, however, there are no sufficient regional governmental structures to respond to this need. As mentioned, individual municipalities, by law, take care of their own residents and matters and more extensive regional co-operation to facilitate this is only starting. In addition, Helsinki and its neighbouring municipalities have become victims of their own economic success: the lack of affordable housing is raised as an issue by creative and knowledge workers interviewed during this research.
Traditionally, Finland specialised in exporting paper, pulp and engineering products. As the domestic market has always been too small for these activities, the country traded globally long before the era of globalisation and policy makers learned early on to pay close attention to the needs of large exporting corporations and to co-operate with them. Finland’s enthusiasm to adopt policies fostering innovation can be seen as a continuation of this long historical approach. Since 1980, investing in innovation has become one of the strongest national policy actions and a trademark of Finland (Ylä-Anttila, 2005; Steinbock, 2006; Vaattovaara, 2009).
National policies developed to support the development of creative and knowledge industries initially mainly focused on raising education levels. Interviews with managers of knowledge industries companies in this project highlighted this and one manager declared that they “do
not have anything else in their business other than skilled workers” (Kepsu and Vaattovaara,
2008b: 29). Helsinki and Finland as a whole have adopted a competitive strategy building upon classical urban economic development success factors: the development of competitive products by increasing the productivity of Finnish workers and firms. Unlike many other countries, Finland has not really promoted Helsinki abroad in order to attract international investment as a mechanism to counterbalance the scarcity of talents and firms. On the contrary it has grown from its own potential (Vaattovaara, 2009).
The focus on education is profound in the Finnish welfare model. The expansion of the university network from three to twenty between the 1960s and 1980s (spread around the nation) and the creation of public financing institutions for business-oriented research and development, were prerequisites for the subsequent growth of the Information or Innovation Society in the country. In addition, the Finnish educational system has provided, from early on, equal opportunities to all strata of the society. Compared with British, French or German educational systems, the Finnish system has never been very selective. On the contrary, opportunities have been provided for all social classes in all parts of Finland (Mäkelä, 1999). Education attendance and labour market participation of women has also been one of the highest in Europe. This has been noted as a unique phenomenon.
Other national actors relevant to the economic development policies and the creative and knowledge economy are ministries, for example the largest and newly established Ministry of Employment and Economy (formerly Ministry of Trade and Industry). Strategic policy decisions are implemented through the Finnish Funding Agency for Technology and Innovation (Tekes), the Technical Research Centre of Finland (VTT) and 15 Employment and Economic Centres (TE- centres). Tekes, the Finnish Funding Agency for Technology and Innovation is the main government financing and expert organisation for research and technological development in Finland. It has been considered a key player in the success of the Finnish economy, particularly when it comes to creating networks between companies and researchers and developing innovation.
“Then we have the cooperation between universities and companies, which is the key issue for competitiveness… it is the best in the world… or say at least best in Europe. And the culprit for this... or the one to accredit for this, is Tekes [Finnish Funding Agency for Technology]. We have a national instrument that offers money mainly to projects where the universities and companies work together. And this culture [of close cooperation between universities and companies] has developed from this... It is clearly the largest asset even when considering the future.”
Eero Holstila, Director of Economic Development, City of Helsinki Another important national actor in the sector is the Finnish National Fund for Research and Development (SITRA). It is an independent public foundation under the supervision of the Finnish Parliament. There also exist several institutions promoting networking in the field. The Finnish Information Society Development Centre (TIEKE) has an important role as a neutral and non-profit organisation in promoting the efforts of its members, within public and private sectors, to create viable tools and expertise for use in the information society.
Currently, Finland is also undertaking a major structural change in its educational system to favour innovation: the establishment of a new innovation university to be called the Aalto University. This university has been created through a major merger of three large existing universities: the Helsinki University of Technology (TKK), the Helsinki School of Economics (HSE) and the University of Art and Design Helsinki (TAIK). Minister Vapaavuori sees this as an important investment to regional competitiveness:
“Another important, very concrete, investment is the Aalto University. It is an internationally remarkable initiative to combine not only technology and economy, but also art.”
STRATEGIES AND POLICIES FOR CREATIVE KNOWLEDGE
4.1.2 Government driven regional and urban policy
In Finland the government has little by little recognised the significance of large urban regions to the country’s success, prosperity and national economy, because of their importance in knowledge and innovation creation (Ylä-Anttila, 2005; Steinbock, 2006; Inkinen and Vaattovaara, 2007). As mentioned earlier, urban politics became a tool of regional politics, aiming for regionally balanced economic development. Large urban regions compete in the global market for businesses and activities that could be located in Finland. The government driven urban development policy in Finland is designed to take the special role of regions into account and make them as strong as possible in the international competition. Today, the decision making power is somewhat less centralised. The current idea is that innovations should stem from local strengths (e.g. social networks, knowledge and R&D, economic capital and natural resources. More responsibilities in formulating the core of regional innovations have been moved to the Regional Councils of Finland and regional public-private clusters established through programmes from the central government. (Tynkkynen, 2008).
The aim of the policy programmes launched by the central government is strengthening the economic development and innovativeness of selected urban regions. The co-ordination responsibility is on the Ministry of the Interior. The profile of Finnish national government’s urban policy could be described as “opportunity-oriented”, focusing on science and innovations in cities as the competitiveness engines (Antikainen and Vartiainen, 2006). Government driven urban policy in Finland is based on a polycentric approach and a network of vital cities and towns. In current regional policy two main tools can be identified: 1) Centre of Expertise Programme (CoE) and 2) Regional Centre Programme (RC).
Centre of Expertise Programme (CoE) is a key national policy aimed at urban regions. It was
started in 1994 with the aim of strengthening the economic development and innovativeness of selected urban regions. It now includes 21 urban areas and is in its third program period (2007-2013). The main idea of the CoE is to promote local and regionally specific economic strengths and potentials. Another main goal is to increase cooperation between different actors: local and regional authorities, the business sector and universities. The model of the programme was reformed for the term 2007-2013 as a cluster-based model. The National Programme involves 13 national Clusters of Expertise (eg. in nanotechnology, energy technology, housing and tourism) and 21 regional Centres of Expertise, one of them the Helsinki region (Centre of Expertise Programme, 2010).
There are different opinions on whether these programmes have been successful or not and have created innovation and fostered competitiveness. The funding involved in the CoE Programme has been relatively small, which has posed limits to what the urban regions can actually do. The OECD (2007: 65) has analysed the national urban policies in Finland and concludes that it has “little in the way of a specific, overt urban policy, but urban areas have been seen as key to a strong technology-orientated spatial policy”. It states that this policy has been successful particularly in the Helsinki city-region, despite light funding.
The Regional Centre Programme (RC) was launched in 2001, after the CoE programme had been working for a few years. While the CoE aims at promoting the innovativeness of larger city regions, smaller and more peripheral regional centres needed their own regional policy
tool. The aim of the programme is to develop a network of regional centres covering every region, based on the particular strengths, expertise and specialisations of urban regions. The Regional Centre Programme implements national strategy. According to national strategy:
“the government is developing a multi-centre regional structure based on a competitive metropolitan region and regional centre network which will maintain the vitality of all regions and facilitate more balanced economic growth throughout the country. Each province must have at least one urban region which offers a competitive location for various types of business and a diversified local job market. In addition the provinces must have successful smaller urban regions, strong municipal centres and rural regions, whose businesses are efficiently networked both within the province and outside.”
Finnish Government 15.1.2004). (Ministry of the Interior, 2010) The programme includes 34 urban regions. The Helsinki metropolitan area and surrounding Uusimaa region are not included in the RC programme. Innovations in these city regions are not necessarily related to international cutting-edge expertise, but rather to more traditional provincial social, natural, and economic strengths (Lemola, 2006).
Figure 4.1 - National regional development programmes and their target areas
STRATEGIES AND POLICIES FOR CREATIVE KNOWLEDGE
The latest innovation programmes in Finland are the Strategic Centres for Science, Technology and Innovation, or the SHOKs (In Finnish: Strategisen huippuosaamisen
keskittymä). The programme started in 2008, with the goal to “thoroughly renew industry
clusters and to create radical innovations” (Tekes, 2010). The SHOKs are new public-private partnerships for speeding up innovation processes. They promote long-term cooperation between the universities and industry, and aim to speed-up the process of using research results and maintain competitiveness in key topic areas. There are six centres in operation in the following fields: forest, ICT, metal products, energy, built environment and health. Director Holstila puts a lot of faith into the SHOK-model:
“A much more effective model [than the Centres of Expertise] is the SHOK [Strategic Centres for Science, Technology and Innovation] […] There is bigger money involved and the initiatives come from the companies. The formation of the SHOKs is one example of the organising capacity… one of our strengths. Single companies have founded limited companies in six different cluster areas, and now Tekes [the Finnish Funding Agency for Technology and Innovation] is funding their activities. […] When the companies themselves have had to buy shares in the company they also have an interest in watching that something really goes on in it. … And you don’t get money from Tekes if you don’t put money in it yourself…”
Eero Holstila, Director of Economic Development, City of Helsinki